Saturday

28th Jan 2023

EU finance ministers draw blank on new tax law

  • Semeta - 'great disappointment' on tax transparency (Photo: European Parliament)

Austria and Luxembourg have blocked an EU deal to increase tax transparency.

Their finance ministers dug in their heels at a meeting in Brussels on Tuesday (14 May) despite pressure from major EU states.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Speaking to press after the event, EU taxation commissioner Algirdas Semeta described their intransigence as a "great disappointment."

He called on the EU to "get its house in order" on tax evasion and urged EU leaders to "rectify the situation" at a summit next week.

"We need full endorsement of the widest possible application of automatic exchange of information [on tax evaders] within the EU," he said.

For his part, Sven Giegold, a spokesman for the European Parliament's Green group, accused Austria and Luxemborg of "shameless obstructionism."

The tax deal concerns an overhaul of an eight-year-old EU law in order to close loopholes on data about income from trusts, foundations and pension funds.

It also concerns ending Austria and Luxembourg's - two financial centres - exemption from automatic exchange of data on tax cheats.

Luxembourg finance minister Luc Frieden and Austria's Maria Fektor said in a joint press conference on Tuesday that they cannot go ahead until legal uncertainties in the new draft law are clarified and until the UK cracks down on tax fraud in its overseas protectorates, such as the British Virgin Islands.

They also noted that they have given the go-ahead for the European Commission to start negotiations on ending bank secrecy in Andorra, Liechtenstein, Monaco, San Marino and Switzerland.

If the group of five agree to hand over data, Austria and Luxembourg's exemption from EU tax transparency will lapse.

The tax debate is now set to take centre stage at the summit on 22 May.

In a sign of increasing pressure on tax evasion as crisis-hit governments scramble to increase their revenues, 17 EU countries have signed a statement demanding the creation of a new global standard for automatic exchange of information.

The standard is to be based on the Foreign Account Tax Compliance Act (FATCA) passed by the US Congress in 2010.

The group - which includes France, Germany and the UK - called for a multilateral agreement to create "a truly global system of automatic information exchange which would mark a step change in our ability to tackle tax evasion."

In a 2012 study on behalf of the commission, Tax Research UK, a London-based think tank, estimated that EU governments lose up to €1 trillion each year to tax fraud.

EU targets tax evasion on savings

The EU commission wants to tighten tax loopholes for EU citizens who hold accounts in member states and in Switzerland, Andorra, San Marino, Monaco and Lichtenstein.

Analysis

Why is petrostate UAE going all in on green hydrogen?

The United Arab Emirates announced its ambition to become one of the world's premier trading hubs for green hydrogen. Interesting, to say the least, for a country that relies on the sale of fossil fuels for its prosperity.

Latest News

  1. Pressure mounts on EU to coordinate visas for Russian rights-defenders
  2. Dutch set to agree to US-led chip controls to China
  3. No record of Latvian MEP's 'official' Azerbaijan trip
  4. Why the new ECHR Ukraine-Russia ruling matters
  5. Europe continues to finance Russia's war in Ukraine with lucrative fossil fuel trades
  6. Official: EU parliament's weak internal rule-making body leads to 'culture of impunity'
  7. Red tape border logjam for EU's 1.3m 'frontier workers'
  8. Greece's spy scandal must shake us out of complacency

Stakeholders' Highlights

  1. European Parliamentary Forum for Sexual & Reproductive Rights (EPF)Launch of the EPF Contraception Policy Atlas Europe 2023. 8th February. Register now.
  2. Europan Patent OfficeHydrogen patents for a clean energy future: A global trend analysis of innovation along hydrogen value chains
  3. Forum EuropeConnecting the World from the Skies calls for global cooperation in NTN rollout
  4. EFBWWCouncil issues disappointing position ignoring the threats posed by asbestos
  5. Nordic Council of MinistersLarge Nordic youth delegation at COP15 biodiversity summit in Montreal
  6. Nordic Council of MinistersCOP27: Food systems transformation for climate action

Join EUobserver

Support quality EU news

Join us